Realfiction Holding AB announces its Year-End Report

The company announces that the Year-End Report for January – December 2020 is now available. The full report is attached as a separate document and can also be downloaded from the company’s website (www.realfiction.com). A printed copy can be ordered via [email protected]. Below is a summary of the Year-End Report.

Important key figures:
• 51% decline in total revenue in Q4, 2020 compared to Q4, 2019
• 61% decline in gross profit in Q4, 2020 compared to Q4, 2019
• 21% decrease (11.3 points) in gross profit margin in Q4, 2020 compared to Q4, 2019
• Net operating cost savings of TSEK 3,361 (55%) in Q4, 2020 compared to Q4, 2019
• Net solvency ratio of 84% at 31 December 2020 compared to 74.7% at 31 December 2019

During and after the period, Realfiction has experienced both positive and negative development in its business, including:

Project ECHO: We continue to see great progress in our work towards the completion of a license integration package. With the feasibility study successfully completed in the beginning of 2021, paving the way for a slimmer and lower-cost product that will be easier to manufacture at scale, we now have an even stronger outlook for the project and a clear path forward with high hopes for both the OLED and LCD based versions of ECHO. We will continue with the ongoing development work in collaboration with our academic partners and we expect to see further progress in the months ahead, and possibly a little more clarity when it comes to how the manufacturing of ECHO will look like.

MaaS for Retail and Exhibitions: Following the completed test launch in 25 EDEKA stores, Realfiction will now follow the expected reductions of COVID-19-related restrictions due to ongoing vaccination programs, in Germany as well as in other potential markets, closely and discuss future plans for the Magic-as-a-Service concept with relevant stakeholders and partners. Despite the COVID-19 pandemic, there are however some positive signs for the future, such as a stronger inflow of requests for quotes in our MaaS for Exhibitions business. This is likely due to customers starting to plan for the ramping up of their post-COVID-19 event activities, even though this period is still at least months away for most of them.

Experience (Hardware): Our hardware sales continued to progress at a low level compared to what we were used to before the pandemic. We are at the same time getting more requests for quotes on larger orders, in the magnitude of tens and even hundreds of systems, compared to six months ago. It will be interesting to see if this trend continues in the months to come, and also how the conversion rate will look like for these large requests when the market situation improves. I would advise against putting too much faith into these potential numbers, but we will be following up on these leads closely.

CEO Clas Dyrholm comments: “In addition to further progress in the development of our ECHO 3D display technology, we were able to complete a heavily oversubscribed directed issue of 35.8 MSEK in the fourth quarter. We also issued warrants to new and existing shareholders that could provide the company with an additional up to 41.0 MSEK in November 2021. I am humbled by the strong confidence in our business, and especially in the development of our ECHO technology, that was shown during this financing round. Crucially, we are now able to finance the completion of the ECHO integration license package and the rest of our business. I look forward to entering the upcoming dialogue with Asian display manufacturers during the spring and summer of 2021 as part of the phase of completing the integration license package, and to expand our cooperation with collaboration partners and insourcing of relevant specialists. 2021 looks promising. We have adapted to the COVID-19 impact on our sales activities and feel more and more confident that our ECHO technology will pave the way for a very prosperous future for Realfiction.”

We highlight the following key figures from the Year-End Report:

Q4 2020 (1 October – 31 December 2020)
• Revenue: TSEK 2,070 (Q4, 2019: TSEK 4,212)
• Gross profit: TSEK 880 (Q4, 2019: TSEK 2,267)
• Gross profit margin: 42.5% (Q4, 2019: 53.8%)
• Result after financial items: TSEK -1,949 (Q4, 2019: TSEK -3,891)
• Earnings per share: SEK -0.10 (Q4, 2019: SEK –0.23)
• Cash flow from operating activities: TSEK -369 (Q4, 2019: TSEK -2,350)

Q1-Q4 2020 (1 January – 31 December 2020)
• Revenue: TSEK 9,501 (Q1-Q4, 2019: TSEK 21,357)
• Gross profit: TSEK 4,985 (Q1-Q4, 2019: TSEK 11,367)
• Gross profit margin: 52.5% (Q1-Q4, 2019: 53.2%)
• Result after financial items: TSEK -9,749 (Q1-Q4, 2019: TSEK -14,792)
• Earnings per share: SEK -0.52 (Q1-Q4, 2019: SEK -1.00)
• Cash flow from operating activities: TSEK -3,162 (Q1-Q4, 2019: TSEK -11,013)